Baum et al. Globalization and Health (2016) 12:27 DOI 10.1186/s12992-016-0164-x
METHODOLOGY Open Access
Assessing the health impact oftransnational corporations: its importanceand a framework
Frances E. Baum1*, David M. Sanders2, Matt Fisher1, Julia Anaf1, Nicholas Freudenberg3, Sharon Friel4,Ronald Labonté5, Leslie London6, Carlos Monteiro7, Alex Scott-Samuel8 and Amit Sen9
Abstract
Background: The adverse health and equity impacts of transnational corporations’ (TNCs) practices have becomecentral public health concerns as TNCs increasingly dominate global trade and investment and shape nationaleconomies. Despite this, methodologies have been lacking with which to study the health equity impacts ofindividual corporations and thus to inform actions to mitigate or reverse negative and increase positive impacts.
Methods: This paper reports on a framework designed to conduct corporate health impact assessment (CHIA),developed at a meeting held at the Rockefeller Foundation Bellagio Center in May 2015.
Results: On the basis of the deliberations at the meeting it was recommended that the CHIA should be based on expost assessment and follow the standard HIA steps of screening, scoping, identification, assessment, decision-makingand recommendations. A framework to conduct the CHIA was developed and designed to be applied to a TNC’spractices internationally, and within countries to enable comparison of practices and health impacts in differentsettings. The meeting participants proposed that impacts should be assessed according to the TNC’s global andnational operating context; its organisational structure, political and business practices (including the type, distributionand marketing of its products); and workforce and working conditions, social factors, the environment, consumptionpatterns, and economic conditions within countries.
Conclusion: We anticipate that the results of the CHIA will be used by civil society for capacity building and advocacypurposes, by governments to inform regulatory decision-making, and by TNCs to lessen their negative health impactson health and fulfil commitments made to corporate social responsibility.
Keywords: Health impact assessment, Health inequalities, Public health policy, Health promotion, Methodology
BackgroundA major challenge for public health in the twenty-firstcentury is to respond to the changing dynamics of capit-alist economies and the attendant impacts on people’sdaily living conditions, and ultimately health equity.Central to this process has been the growth in the powerand influence of transnational corporations (TNCs).Since TNCs increasingly dominate global trade andinvestment and shape national economies, the adversehealth and equity impacts of their practices are now
* Correspondence: [email protected] Institute of Health, Society and Equity, Flinders University, GPOBox 2001, Adelaide, SA 5001, AustraliaFull list of author information is available at the end of the article
fundamental influences on public health. Despite this,researchers have not yet developed the tools or methodswith which to study the health equity impacts (bothpositive and negative) of individual corporations andthus to inform actions to mitigate and reverse negativehealth impacts and reinforce any positive impacts. Thispaper reports on the process of developing a frameworkdesigned to conduct corporate health impact assessment,the insights generated by this process and the resultantframework, developed at a meeting held at theRockefeller Foundation Bellagio Center in May 2015.The paper also discusses ideas canvassed at the meetingregarding the feasibility of conducting such impact as-sessment and its likely benefits to public health. The
le is distributed under the terms of the Creative Commons Attribution 4.0.org/licenses/by/4.0/), which permits unrestricted use, distribution, andive appropriate credit to the original author(s) and the source, provide a link tochanges were made. The Creative Commons Public Domain Dedication waiverro/1.0/) applies to the data made available in this article, unless otherwise stated.
Baum et al. Globalization and Health (2016) 12:27 Page 2 of 7
workshop included experts on TNC practices, the healthimpact of TNCs in the food and mining sectors, theevaluation and assessment of health impacts, and civilsociety activists who advocate reversing adverse impacts.
Public health significance of TNCsTransnational corporations (TNCs) are incorporated orunincorporated enterprises operating across multiplecountries comprising parent enterprises and their for-eign affiliates. It is estimated that there are now over100,000 TNCs operating globally [1]. Many TNCs areeconomies which are larger than those of national states(see Fig. 1) [2]. Of the 100 governments and corpora-tions with the highest annual revenues in 2014, 63 arecorporations [3] and 37 are governments [4]. Thisgrowth is facilitated by the broader global context whichpromotes neoliberal policies, including trade liberalisa-tion, producer subsidies and strengthened private prop-erty rights. The growth is also driven by growingdemand for TNC products in developing countries. Agrowing body of research has examined the practices ofTNCs in sectors such as food and beverage, tobacco,pharmaceuticals and extractive industries. It shows thatTNC products and operations can support gains in pub-lic health through investment in host countries whichcontributes to improvements in employment opportun-ity, working conditions, education, infrastructure orhealth service provision [5]. Some TNCs also undertakepractices intended to assess and improve performance inareas of environmental impact, social accountability or‘shared value’ [6]. Freudenberg argues, however, that
Fig. 1 Comparing the size of the world’s largest corporations with selected
over the past two decades world economic arrangementshave been increasingly changed to suit the needs of cor-porations and “as a result set the stage for the twenty-first century disease epidemics” [7]. The UN SpecialRapporteur on the Right to Food said that the globalfood system which is largely run by TNCs “is a publichealth disaster” [8]. The Commission on the Social De-terminants of Health [9] noted that binding trade agree-ments together with increasing corporate power andcapital mobility have diminished individual countries’capacities to ensure that economic activity contributesto health equity, or at least does not undermine it. TheLancet—University of Oslo Commission on Global Gov-ernance for Health noted that “Private firms have an in-fluential role in contemporary global governance. Largetransnational companies wield tremendous economicpower, which they can deploy to further their interestsin global governance processes and global markets” [10].The Commission went on to note that, although therewere benefits from the operation of TNCs, “they canalso harm health through dangerous working conditions,inadequate pay, environmental pollution, or by produ-cing goods that are a threat to health (e.g., tobacco)” [9].In addition to these powerful voices the Director Gen-eral of the World Health Organization [11] has pointedto the power of TNCs and the ways in which they caninfluence the public health agenda adversely. An increas-ing amount of research indicates that while there aresome positive effects there are significant negative im-pacts on health from corporate structures, products andpractices (see Table 1).
countries.2
Table 1 Examples of TNC impacts on health
Transnational corporations operate in many sectors including foodand beverages, extractive industries, tobacco, alcohol andpharmaceuticals. They have the capacity to both promote andharm health. Examples of beneficial health impacts from TNCsinclude a range of shared value initiatives:• Mars (chocolate) engaging in sustainable cocoa initiatives throughemploying science, technology, and certification to assist farmersthrough increasing yields and sustainable supply [21].
• Nestlé adding micronutrients including iron and iodine to foods toimprove health in impoverished regions [22].
• BHP Billiton improving the quality and reliability of local suppliersthrough the “World Class Supplier Program” in Chile, leading tosignificant employment growth [23].Examples of adverse health impacts from TNCs are:
• In 1998, at a time when the largest number of HIV/AIDS afflictedpeople lived in South Africa, 41 transnational drug companies suedthe government of South Africa for initiating measures to reduceprices of anti-retrovirals [24].
• Coca Cola’s depletion and pollution of groundwater in India to make aproduct with 10 teaspoons of sugar per serving, contributing to globalepidemics of obesity and diabetes [25].
• In June 2009 an outbreak of E.coli food poisoning in the UnitedStates was linked to Toll House refrigerated cookie doughproduced by Nestlé at a plant in Danville, Virginia. The companyrecalled all Toll House products in the country, but it came tolight that the plant had previously refused to give inspectors fromthe federal Food and Drug Administration (FDA) access to internalrecords relating to matters such as pest control and consumercomplaints [26].
• The 1984 toxic gas leak from the Union Carbide chemical plant inIndia, which included the loss of life of thousands of people in Bhopalwhere the community still suffers the aftermath and is campaigningfor adequate clean-up, compensation and justice [27].
• Philip Morris Asia Limited sued the Australian government to repealplain packaging laws despite the fact that 1 billion tobacco-relateddeaths are predicted globally this century [28].
• Tax avoidance strategies by McDonald’s global operations havepotentially cost European governments 1.0 billion Euros andthe Australian Government $497 million dollars in unrealisedreceipts between 2009 and 2013 alone, reducing amountsgovernment have to invest in health promoting infrastructureand services [29].
• Extractive industries have huge negative environmental and socialimpacts. Since the Australian TNC BHP began mining in Papua NewGuinea in the 1980s, hundreds of millions of tons of waste have beendumped into the Tedi River causing irreversible damage to the riverecology and mass deforestation of surrounding areas and resultanthealth impact on Indigenous peoples [30].
• A narrative review indicated that pharmaceutical corporations suppressand misinterpret scientific evidence which leads to systematicoverestimation of the safety and efficacy of products, and also exertspressure on regulatory bodies against disclosure of adverse effectswhich are deemed to be ‘trade secrets’ [31].
These examples are indicative, but not exhaustive, of the scope ofcumulative local, regional, national and global health impacts thatpotentially result from the activities of TNCs. They are also indicative ofthe ways in which the economic power of TNCs is likely to influencethe pressures on governments and other stakeholders to make trade-offs between economic and social goals within processes of nationaldevelopment.
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Despite such studies there has been no research thathas developed an overarching analytical framework andsystematic methodology that can be used to assess theimpacts of TNC practices on populations within coun-tries from a health equity perspective.
MethodsBellagio meeting: developing a corporate health impactassessmentOur meeting was held in Bellagio in April 2015 and wasattended by representatives from academia, civil societyand TNCs. Its main aim was to discuss the usefulnessand feasibility of conducting a corporate health impactassessment with a focus on its application in low andmiddle income countries. The meeting oriented its dis-cussion on the practices and health impacts of corpora-tions in the food and beverage (excluding alcohol) andextractive industry sectors. Discussions were held on theviability of developing and implementing a corporatehealth impact assessment from the perspectives of healthequity researchers; of activists campaigning against nega-tive health aspects of corporate practices and corpora-tions globally, nationally or within particularcommunities; and corporations representative of ourtwo focal sectors (food/beverage and extractive indus-tries). This follows development of a range of other toolsbeing used to assess TNC performance [6, 12, 13]. OurCHIA framework augments these other approaches be-cause it seeks to assess individual TNCs across the fullscope of their structures and practices; provides a tool tocompare a TNC’s practices across countries; and is fo-cused specifically on health and health equity impacts.Workshop participants agreed that corporations haveboth positive and negative impacts on health, and thatgovernment oversight is important in minimising thenegative impacts. Civil society activists and researchersstressed significant detrimental environmental impacts,dislocation of traditional communities, unsafe workingconditions leading to high rates of injury and death, andthe adverse impact of unhealthy products. The corporatesector representatives emphasised the potential for gainsin areas such as employment standards, workplace safetyand environmental sustainability, and through corporatepolicies to address social responsibility or create ‘sharedvalue’.Although there was some concern about the processes
that would be involved in a corporate HIA all partici-pants agreed that such a tool would be helpful especiallyas it would focus on the operations of individual corpo-rations including their entire supply chain. Table 2 de-scribes the ways in which this was seen to be the case bydifferent groups of participants.Participants also discussed the criteria by which corpo-
rations would be selected for corporate health impact as-sessment (CHIA). This decision would be informed by aconsideration of the characteristics of the industry sec-tors in which a TNC operates, and the characteristics ofthe TNC itself (including brand profile, the countries inwhich it operates and its scope of operations across asupply chain). Further considerations are the type and
Table 2 Predicted value of Corporate Health ImpactAssessment
Predicted value to researchers
Evidence to inform public policy decisions
Evidence elucidating the health and health equity impacts ofindividual TNCs’ structures, products and practices; and how thesediffer between countries
Understanding of how TNC practices affecting health are influencedby international and national regulatory structures
Predicted value to civil society activists
Advocacy tool to enhance community capacity to understand andengage on issues associated with health impact of TNC operations
Facilitate community involvement in debates about TNC healthimpact and possible government response
Predicted value to corporations
Evidence to inform corporate policies and practices to reduce adverseand optimise positive impacts on health and health equity withintheir countries of operation; and to achieve greater equity of practicesacross countries
Predicted value to governments and policy-makers
Evidence to inform policy decisions regarding project approval andappropriate regulation
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likely quality of information on the TNC’s operations,the capacity of the research team within the countries inwhich the TNC operates, and the level of civil societyinterest. Given our interest in the impact of regulation itwould also be desirable to select TNCs which operate incountries with widely varying regulatory environments.Considerable discussion was held about how effective
engagement with affected communities within countriescould be integral to the conduct of a CHIA. Recognisingthat HIA methodology has been criticised for being verytechnical and, for example, not treating communityknowledge as legitimate, the meeting was adamant thateffective CHIA would rely on at least effective commu-nity engagement processes and in some instances shouldbe community-driven when the capacity exists withincivil society.
Assessing health impactHealth impact assessment (HIA) has been used overmany years to produce evidence-based recommenda-tions to inform decision-making about proposed pro-jects, plans, programs and policies in order to maximisetheir positive and minimise their negative impacts onhealth. HIA stresses the importance of defining healthimpacts broadly by including social, environmental andeconomic factors that determine health and healthequity outcomes [14–17]. The workshop was interestedin the adaptation of HIA to consider health impacts ei-ther concurrently or retrospectively (ex post) in terms ofexisting or past TNC practices, or prospectively and pre-dictively (ex ante) to ascertain likely impacts when new
operations are proposed. An ex ante HIA forecasts po-tential impacts as part of the planning, design and ap-proval of an intervention. Ex post assessment identifiesactual impacts during and after implementation [18, 19]and provides an evidence base for corrective actions tobe taken if necessary, and to inform ex ante HIAs. HIAincorporates five steps: screening, scoping, identification,assessment, decision-making and recommendations, aswell as evaluation and follow-up. In examining thefeasibility of applying HIA to corporate practices theworkshop acted as the scoping stage of a HIA process. Italso then developed a framework within which the iden-tification and assessment stages could be conducted.
Results and discussionFramework for corporate health impact assessmentA draft framework to guide the design and implementa-tion of CHIA was presented to the participants on thefirst day of the meeting. This was then extensively re-vised over the following two days, through detailed dis-cussion about the importance of understanding thedirect and indirect mechanisms by which TNCs affecthealth. The discussion also highlighted the importanceof studying a TNC’s global, national and local operationsand so emphasising the need for the framework to beadaptable to different contexts. This discussion resultedin the framework shown in Fig. 2.An overview of the content of the framework is
provided below:
A. Context: global operating context (history of TNC;effect on TNC of global regulatory environmentincluding trade agreements; mapping of linksbetween political and TNC elites); supply chainanalysis spanning primary production, processing,manufacturing, transport, retail and consumption;national operating environment (agreementsbetween TNC and government, description ofnational regulatory environments, nationalcorruption index, activities of industry associations);regional community or groups affected by the TNC’sactivities within the LMIC (description of regionsand communities and groups affected).
B. Structure, products and practices of TNCs:organisational structure, political financing andlobbying practices, and business practices includingboard membership and business affiliations,corporate philanthropy and sponsorships, use ofhealth impact assessment (HIA), environmentalimpact assessment (EIA) and TNC productsincluding energy and nutrient components, anddistribution and forms of creative and integratedmarketing especially targeted to children andyoung people.
Fig. 2 Framework for conducting a corporate health impact assessment
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C. Health impact of the TNC within the country: Thesecategories allow for the possibility of recognisingboth positive and adverse impacts on health in anyof these domains:
Workforce and working conditions (eg.description, occupational health systems,remuneration of workers in relation to cost ofliving indexes, extent of unionisation, quality ofprovision of health care and impact on socialdeterminants of health such as housing).Social conditions (eg. impact of TNC goods onlocally produced goods and services and netemployment levels, impact of operation on localliving conditions, the value of corporate socialresponsibility initiatives, social dynamics created
by TNC operations including impact of fly-in-fly-out workers, impacts on social, cultural andspiritual life, and the impact of migrant labourin mines affecting sexual practices).Environment (eg. impact on natural systems inways that affect health or health risk, includingair/water quality, exposure to pollutants, landclearing, energy consumption, water, wastedisposal).Consumption patterns (eg. impact of quality andconsumption of TNC goods on health, nationalmarketing practices).Economic mediated impact on health (eg.impact on TNC operations on overall economicconditions including tax revenues, reliance and
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vulnerability of national economy on TNC,economic and health impacts on local businesses/farmers).
Standard HIA data-gathering methods include litera-ture sources, and collection of quantitative and qualita-tive information, including both primary and secondarydata. Primary data are used explicitly for the HIA, suchas community consultations or stakeholder interviews.Secondary data include relevant peer reviewed articlesand routine data collected by companies or governmentsthat is used for other purposes. Following standard datagathering methods, evidence relating to each domain inthe framework would be collected through a mix of:analysis of key documents (such as corporate policies,reports and media releases, government or internationalagency reports); interviews with key players (includingcorporate actors, lobbyists, current and former politicalstaff, members of non-government organisations and af-fected communities within the countries concerned);and searches of databases for evidence on impacts of theTNCs on health. The information collected in each ofthe above domains would be analysed to determine thelikely impacts of the TNC’s operations on overall popu-lation health and health equity. This analysis would alsodetermine which groups within the affected countrywould be particularly subject to adverse health impactsand which would gain health benefits from the TNC’soperation.The framework is designed to be applied to corpora-
tions within countries. We anticipate that the CHIA willhave to cover very different contexts and will have to beadapted to local conditions. We acknowledge that insome countries it will be easier to collect a robust set ofdata than in others. Applying the CHIA framework tothe operations of one TNC within several countrieswould then enable a comparison of health impacts indifferent national settings, and some assessment of theoverall impact of the TNC. A major advantage of thecross-national comparison was seen to be the ability todetermine from this information the impact of differentnational regulatory structures on the ways in which cor-porations operate. It would also permit comparisonsamong different corporations.The meeting considered the CHIA framework to be
most likely used by civil society activists, with academicresearch support, for advocacy purposes. However it wasnoted at the meeting that TNCs are increasingly con-cerned about their public image in response to concernsexpressed by activist civil society groups, shareholder ac-tivism and potential employees who desire to work foran ethical company. Consequently, in some circum-stances TNCs may choose to co-operate with the CHIAprocess (e.g. sharing more of their internal documents
and participating in the assessment itself ) and to use theresults to inform their own operations. In the eventTNCs decide not to co-operate the CHIA process wouldstill be possible from publicly available documents,media and data collection from those experiencing thehealth impacts. As local and national governments de-velop capacity in HIA [20], some may choose to applythis approach to corporate practices as well as to publicprojects. The necessary skills and capacities for under-taking a CHIA include a multi-disciplinary team, legalexpertise on the structure and operations of TNCs, un-derstanding the role and practice of health impact as-sessments, and public health expertise to determine thehealth impacts. Other necessary expertise includes thatrelating to the products or practices of particular typesof TNCs; for example nutrition experts for food industryTNCs and occupational health and safety expertise forextractive industry TNCs. A civil society perspective isalso necessary for informing a CHIA.
ConclusionsIn our continually globalising world, TNCs have a power-ful impact on health and well-being in almost every coun-try on earth. This impact is mediated through thebusiness and political practices of the TNCs, the types ofregulatory environments in which they operate and overwhich they have increasing influence, TNCs’ employmentand environmental practices, and the ways in which theiroperations affect communities, regions and countries.There has been very little systematic investigation of thehealth equity impacts of these corporations. Our Bellagiomeeting enabled a detailed consideration of the value,challenges and practicalities of conducting such systematicstudies using the methodology we propose. It suggestedthat there will be significant benefits in documenting thesehealth effects through a formal corporate health impactassessment process. The meeting was clear that the CHIAshould be linked to the overarching aim of reducing eco-nomic inequality and social injustice. The results wouldbe available for use by civil society advocates, corporationswho wish to lessen the adverse health impact of their op-erations and by governments who would be able to assessdifferent regulatory frameworks according to their abilityto reduce adverse health and equity impacts and/or en-hance health benefits of TNC operations.
AcknowledgementsWe thank the Rockefeller Foundation and the Faculty of Health Sciences,Flinders University, for supporting the Bellagio meeting and Paula Lynch(Flinders University), whose administrative support was vital to a successfulmeeting. We would also like to thank all the civil society and corporateparticipants for their contribution to the discussions and ideas.
Authors’ contributorsFB drafted the article based on discussions with all the authors at a meetingheld at the Rockefeller Foundation Bellagio Center, Italy, 26–28 May, 2015,and a background paper for the meeting prepared by JA, FB and MF. MF,
Baum et al. Globalization and Health (2016) 12:27 Page 7 of 7
DS, SF, and JA made critical comments on a first draft of the article. A draftof the article was circulated to all authors who made critical comment onthe content and all approved the final draft.
Competing interestsAll authors declare: financial support from the Rockefeller FoundationBellagio Center for the submitted work, FB and DS received a conferencegrant and AS, DS, LL and CM received travel assistance; RL is supportedthrough the Canada Research Chair Program; no financial relationships withany organisations that might have an interest in the submitted work in theprevious three years; no other relationships or activities that could appear tohave influenced the submitted work.
Author details1Southgate Institute of Health, Society and Equity, Flinders University, GPOBox 2001, Adelaide, SA 5001, Australia. 2School of Public Health, University ofthe Western Cape, Bellville 7535, South Africa. 3School of Public Health, CityUniversity of New York, New York, NY 10033, USA. 4Regulatory InstitutionsNetwork, The Australian National University, Canberra, ACT 2601, Australia.5School of Epidemiology, Public Health, and Preventive Medicine, Universityof Ottawa, OttawaOntario KIH 8M8Canada. 6School of Public Health andFamily Medicine, University of Cape Town, Cape TownObservatory,7925South Africa. 7Center for Epidemiological Research in Nutrition andHealth, University of São Paulo, Sao Paulo, SP, Brazil. 8Department of PublicHealth and Policy, University of Liverpool, LiverpoolL69 3GBUK. 9People’sHealth Movement, New Delhi 110017, India.
Received: 2 November 2015 Accepted: 9 May 2016
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